Children in the family business: Do they really want it?

Posted by on Dec 5, 2013 in Family Business, Transition Planning | 0 comments

Here’s another story for you about children in the family business and passing it on to the future generation – and like all good stories, this one is true.  It is the uncle of someone I know, who was a farmer.

This man and his brother owned a large and very successful farm. They had taken over the running of the family owned businesses from their father, and he had taken it over from his.

Both brothers were highly ambitious and worked extremely hard. They had big plans to grow the business and they regularly worked very long hours starting work early in the morning and working through till late in the evening.

Their plans came to fruition. Most of the profits were re-invested in the business. They were able to purchase adjacent farms and they diversified the business in several ways. They used part of their land to build a vacation resort; they started up a farm equipment business; and they bought up even more land which they leased out to other farmers.

This uncle had no children, but his brother had three boys and a girl. It was taken for granted that on his retirement his sons and daughters would take over the running and ownership of the business and that, in time, they would pass it on to the following generation; the succession was taken for granted.

So it came as a huge shock when two of the brothers and the daughter announced that they had no interest in taking over the business and that they wanted to do their own thing in life. And that is what they did (as it happens, very successfully).

Naturally they wanted their share of the inheritance and, to accommodate this, much of the business had to be sold. Fortunately, enough remained for the other son and he still runs the downscaled business today; but in the process there were huge rifts in both the business and the family.

Many family business owners tend to be very quick to presume that their children want in on the business just as they did, and that they share the same motivations and business goals. However, as in the case above, this is frequently not the case.

The reason why the departure of the three siblings came as such a shock was because it had never been discussed. They had never been asked if they wanted to continue with the business; it had simply been assumed that they would.

Many of the problems and heartache that resulted from their decision could have been avoided if it had been discussed previously. As it was they were very brave to make the announcement when they did; they were fully aware of the shock wave it would cause.

The moral: Never presume things about your children in the family business.

You may never, ever presume that family members want to carry on with the family business.  As has been evidenced by this very real story, it can cause rifts that last for decades.  And the way to avoid all of this is….

Make sure that you properly communicate.

Once you stop presuming, then you can start asking. Just ask your children what they want to do with their lives, and ask them frequently. Do they want to stay in the business or do they want something else? Listen carefully to what they have to say, and don’t pressure them to stay.

Had it been known in advance that my uncle’s nephews wanted out; it could have been accommodated. They could have been let go without all the problems, and the transition of my uncle and his brother could have been handled very differently.

It’s not over ’til it’s over. (People and things change.)

If your children indicate at age 17 that they don’t want the business, this may not be time to take down the sign and sell the land. People change as they grow up and go through different stages in their lives, and their ambitions and desires change too, so keep it on the agenda.

Let them go their own way.

We encourage you not to be frustrated if your children want different things from life than you did.  If you stop to think about it rationally (which we realize is very hard to do), you may suddenly know that you are proud that your children are not simply taking what is handed to them without question.  If they have the confidence to do things their own way, let them!  And if they want to be children in the family business, let them do this as well.

Listen to what your children have to say.

As your children grow older, it’s very likely you will learn something new.  You will learn more about who your children are and what their skills and talents and desires are; but you may also learn incredible new things about your business and how to run it well.  Why don’t they want to be part of the business? Is it that they aren’t being listened to, or the business is running with last century’s equipment? Listen closely, because it may lead to the greatest success your business has ever known – and happiness for you and your children in the family business, or out of it.

Another happy ending!

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